Monsanto Abandons $47 Billion Takeover Bid for Syngenta

Monsanto said on Wednesday that it was abandoning its $47 billion takeover bid for the Swiss agricultural chemical manufacturer Syngenta after the company rebuffed a newly sweetened offer.

In a statement, Monsanto said it had offered a new proposal worth 470 Swiss francs (about $500) a share, having raised the amount of cash it was putting on the table and increasing the reverse breakup fee. It said it was walking away because there was no “basis for constructive engagement from Syngenta.”

It is the biggest withdrawn deal since AbbVie called off its $54 billion takeover of the Irish drug maker Shire in late 2014, according to data from Standard & Poor’s Capital IQ.

The proposed deal, first made public in May, would have created an agricultural behemoth with the largest market share in the world in both seeds and agricultural chemicals. Monsanto is the leader in seeds and genetically engineered traits, while Syngenta leads in chemicals, which include insecticides, fungicides and herbicides.

Hugh Grant, the chief executive of Monsanto, flew to Switzerland last week to present the revised bid to Syngenta’s chairman, Michel Demaré, according to a person briefed on the matter. Mr. Demaré called Mr. Grant on Wednesday morning to say that his board had unanimously rejected the offer.

Syngenta, which has steadfastly refused Monsanto’s entreaties, said the latest offer significantly undervalued the company and was “fraught with execution risk.”

The company also noted that “recent market volatility highlighted the significant risk” for its shareholders. While Monsanto’s latest offer was worth 470 francs when it was made on Aug. 18, it was worth only 433 francs at the close of trading Tuesday because of a decline in Monsanto’s share price.

“We engaged with Monsanto in good faith and highlighted those key issues which required more concrete information in order to continue a dialogue,” Mr. Demaré said in a statement. “Our board is confident that Syngenta’s long-term prospects remain very attractive with a leading portfolio and a promising pipeline of new products and technologies.”

Each company said it would now concentrate on its stand-alone businesses. That could focus investor pressure on executives of each company to meet earnings and growth targets, but particularly those of Syngenta. American depositary receipts of Syngenta fell nearly 16 percent soon after the announcement and closed at $67.51, down nearly 14 percent.

A survey of Syngenta shareholders and former shareholders by Sanford C. Bernstein & Company found overwhelming support for Syngenta to negotiate with Monsanto. The average acceptable price for these investors was 473 Swiss francs, just slightly more than Monsanto’s most recent offer.

Shares of Monsanto rose more than 8 percent to $97.08, as investors appeared relieved that the company was withdrawing from an increasingly costly pursuit.

In an effort to allay antitrust concerns, Monsanto had said it would divest itself of Syngenta’s seed business and overlapping chemical businesses. The proposed reverse breakup fee — which was raised to $3 billion in its latest offer from $2 billion previously — was also aimed at those concerns. It would have been paid to Syngenta if the deal did not go through because of antitrust reasons.

Still, Syngenta had said those steps alone would not be enough to secure antitrust approvals in many countries, making it risky to enter an agreement with Monsanto. Some American farmers were also concerned that the deal would accelerate the concentration that had been occurring in the seed and chemical businesses, leaving them with fewer choices and higher prices.

“American agriculture is already far too concentrated, leaving family farmers and ranchers at a great disadvantage in the marketplace,” Roger Johnson, president of the National Farmers Union, said in a statement Wednesday. He said the collapse of the deal was “clearly not only good news for family farmers but for economically competitive markets as well.”

The proposed deal was somewhat surprising because Monsanto had tried to leave behind its history as a chemical manufacturer and reposition itself as a company promoting “sustainable” agriculture. For instance, some genetically engineered crops make their own toxins to kill insects, potentially reducing the need for spraying insecticides.

Monsanto executives, however, said that the future of agriculture rested in an integrated, precision approach in which digital information on weather, soil conditions and so forth would be used to select the optimal seed varieties and chemicals for each plot of land. That approach would be easier to provide, they said, if Monsanto had more chemicals in its tool kit.

Genetic engineering and chemicals can also work together. Monsanto’s biggest selling biotech crops are those engineered to be resistant to its herbicide Roundup, allowing farmers to spray Roundup to kill weeds without hurting the crops. That led to a sharp increase in the use of Roundup and other forms of the chemical glyphosate.

The Roundup business faces its own challenges. Overuse of Roundup and other forms of glyphosate has led to the evolution of weeds resistant to that chemical, forcing farmers to use other chemicals as well. Moreover, the World Health Organization recently said that glyphosate was probably a human carcinogen.

Syngenta executives said Monsanto’s interest in a deal reflected the slowing of growth in genetically engineered seeds, forcing Monsanto to seek new business elsewhere.

The deal could have provided other benefits to Monsanto as well. The company, which has headquarters in St. Louis, once said it would put the official headquarters of the combined company in Britain, where tax rates are lower than in the United States. Syngenta is based in Basel, Switzerland.

The combination might have also provided the opportunity for Monsanto to rename itself, potentially escaping some of the vilification that has come from the its association with genetically engineered crops.

Monsanto said it would now concentrate on its own growth and would resume share buybacks as soon as practical.

A version of this article appears in print on , on Page B3 of the New York edition with the headline: Monsanto Drops $47 Billion Bid for Syngenta After It Rejects an Improved Offer . Order Reprints | Today’s Paper | Subscribe